RITES Ltd, a prominent Central Public Sector Enterprise (CPSE) under the Ministry of Railways, has achieved the prestigious ‘Navratna’ status, becoming the 16th CPSE in India to be granted this distinction. This article explores why RITES Ltd earned this coveted status and the potential benefits it offers.
RITES Ltd is known for providing transport infrastructure consultancy, railway inspection, rolling stock leasing and maintenance, and various related services. The achievement of Navratna status acknowledges its contribution to the nation’s growth and development.
Benefits of Navratna Status for RITES Ltd:
Attaining Navratna status brings several advantages for RITES Ltd, including:
1. Mergers and Acquisitions: The Board of Directors of CPSEs with Navratna status gains the authority to undertake mergers and acquisitions within India and abroad, enhancing RITES Ltd’s growth prospects.
2. Investment Powers: While they can invest abroad, these CPSEs require approval from the Cabinet Committee on Economic Affairs (CCEA) for foreign investments, providing opportunities for global expansion.
3. Expedited Business Tours: The Chief Executive of the PSU is empowered to approve business tours abroad for functional directors, up to five days’ duration (excluding study tours and seminars) in emergency situations, with intimation to the administrative ministry’s Secretary.
Understanding the Navratna Status
The Indian government classifies Public Sector Undertakings (PSUs) into three categories: Maharatna, Navratna, and Miniratna. To attain Navratna status, a PSU must meet specific criteria, including financial performance and operational excellence.
Eligibility Criteria for Navratna Status:
For a company to obtain Navratna status, it must fulfill the following requirements:
1. Miniratna-I, Schedule ‘A’ Company:
The PSU should already be classified as a Miniratna-I.
It must be a Schedule ‘A’ company, indicating its significant presence and operations.
2. Excellent MoU Ratings:
The PSU should have achieved an ‘excellent’ or ‘very good’ rating in its Memorandum of Understanding (MoU) with the government in three of the last five years.
3. Composite Score of 60:
The PSU must have a composite score of 60 or more in six performance indicators, demonstrating its consistent and substantial performance.
To achieve Navratna status, a PSU must also meet specific financial benchmarks, including:
- A net profit of over Rs 5,000 crore for three consecutive years.
- An average annual turnover of Rs 25,000 crore for three years.
- An average annual net worth exceeding Rs 15,000 crore for three years.
List of Other 15 Navratna PSUs:
The esteemed list of the 15 existing Navratna PSUs in India includes
- Bharat Electronics Limited,
- Container Corporation of India Limited,
- Engineers India Limited,
- Hindustan Aeronautics Limited,
- Mahanagar Telephone Nigam Limited,
- National Aluminium Company Limited,
- National Buildings Construction Corporation Limited,
- Neyveli Lignite Corporation Limited,
- NMDC Limited,
- Rashtriya Ispat Nigam Limited,
- Shipping Corporation of India Limited,
- Rail Vikas Nigam Limited,
- ONGC Videsh Ltd,
- Rashtriya Chemicals & Fertilizers Limited, and